3.15pm update

Brown writes off euro referendum before election

Chancellor Gordon Brown today effectively killed off any prospect of a referendum on the euro this parliament, by announcing he was not commissioning a fresh assessment of his five economic tests.

Mr Brown said the Treasury would review progress on the tests in the 2005 budget. This is all but certain to be too late for a poll before the general election, expected in the spring. Anti-euro campaigners said the announcement meant there was no realistic chance of a referendum before 2008.

Mr Brown announced last June that only one of his five tests on whether euro entry would be good for the British economy had been passed.

But he left the door open for a referendum in this parliament by saying he would consider in this budget whether the tests should be reassessed. A positive decision could have cleared the way for a poll as early as the autumn.

Today, he told the Commons: "While the government does not propose a euro assessment be initiated at the time of this budget, the Treasury will again review progress at budget time next year and report to the House."

Matthew McGregor, campaign manager of the 'no' campaign against British entry, said it was implausible that an assessment of the tests would be launched next year, within weeks of the probable date of the election.

The shortest possible timetable for a credible reassessment initiated in the 2006 budget, followed by a fair period for campaigning, would see the referendum held in spring 2008 at the "absolute earliest", he said.

Mr McGregor said: "The chancellor has knocked the euro off the political agenda - now the government can concentrate on what it was elected to do. Gordon has made the right decision for Britain."

Lucy Powell, campaign director of the pro-euro Britain In Europe group, said: "The chancellor's decision not to recommend euro entry for now is hardly unexpected: it has been clear for some time that the government would not call a euro referendum in this parliament. But it is still another missed opportunity for Britain.

"Britain In Europe continue to believe that joining the euro is in our long-term national interest and that we are missing out on higher trade, investment and economic growth by staying out.

"With Britain's future prosperity at stake, pro-Europeans cannot afford to dwell on past disappointments; we must focus all our energy on campaigning with renewed vigour for a euro referendum to be held soon after the next general election."

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